By Jason Hughes
Bids to purchase Horton Plaza are due in early February. At least two of the bidders are going all-out with amazing new plans that would render the existing Horton Plaza unrecognizable—and give it the shot in the arm that Ernie Hahn did back in the early 80’s when he originally built it. New plans show incredible high-rise residential, hotel and office—with integrated retail and pedestrian thoroughfares. The confidential renderings that I’ve seen are exciting—and I‘m looking forward to seeing who wins!
The Latest on my Battle to Ban Dual Agency
Throughout history, the commercial real estate world has revolved around landlords, with the largest commercial real estate firms representing landlords in leasing, asset management, property management, capital markets, etc. What many people may not know is that these commercial real estate companies both primarily represent landlords—but that THEY ARE ALSO LANDLORDS TOO! For example, in downtown San Diego (and this is true in nearly every major office market), a JLL subsidiary (LaSalle) OWNS 525 B Street; for the last 20 years, CBRE has asset managed (a much higher fiduciary than property manager) 550 Corporate Center. One of the largest developers in the nation is Trammell Crow—and guess who owns Trammell Crow? Yep—CBRE. In fact, CBRE owns and/or manages as a fiduciary 2.5 billion SF of commercial property; that is equivalent to EVERY SINGLE OFFICE BUILDING (large and small) in CA, OR, WA, NV, AZ, UT, CO, NM & ID COMBINED! These landlord brokerage firms are spending millions of dollars to water down agency laws in response to the California Supreme Court’s ruling in Horiike vs. Coldwell Banker (click here for more info). Essentially, the courts asked Sacramento lawmakers to legislate new laws for dual agency—as the judges ruled that you can’t be a fiduciary to two opposite opposing interests (i.e. represent both landlords and tenants). Unfortunately, the industry (and these dual agents) makes billions of dollars keeping tenants in the dark about this problem—and they’re spending millions to re-write the laws in their favor. We’ll see if the Sacramento lawmakers do the right thing—or if they vote with who will help fund their next election.
Thomas Jefferson School of Law Building (East Village)
There will be a 170,000 SF opportunity in downtown as Thomas Jefferson School of Law will be downsizing into approximately 50,000 SF (they’re currently shopping options throughout the city).* The real estate vultures are circling the carcass—and might find gold with the opportunity. It’s risky—as it doesn’t have ballpark views—but could be very cool with high ceilings and that industrial vibe that’s so trendy for tech. It will be interesting to see who lands it—and what repositioning is done for re-leasing the project.
*An earlier version of this story inaccurately stated the school had defaulted on its mortgage. Instead, it was the restaurant, Bottega Americano, that is on the ground floor of the same building that the school occupies, who defaulted on its lease and its owners filed for Chapter 7 bankruptcy.
The Spawar Complex along the I-5 freeway (across from Old Town) is soon to be a major redevelopment opportunity. The Navy has 62 acres—47 of which are along the freeway and the balance across PCH Highway to the west. It’s some fantastic land—with direct access to the Old Town train and trolley station. It could be redeveloped into millions of square feet of new commercial space—or maybe a soccer stadium? Or Sports Arena? Entertainment venue? Or??? Stay tuned for more information!
Jason Hughes is chairman, CEO, and owner of Hughes Marino, an award-winning commercial real estate company with offices across the nation. A pioneer in the field of tenant representation, Jason has exclusively represented tenants and buyers for more than 25 years. He writes about topics in commercial real estate from a tenant’s perspective on his blog, Downtown Dirt. Contact Jason at 1-844-662-6635 or firstname.lastname@example.org to learn more.